Objective Explanations of SCM Software

What This Article Covers

• How did Gartner grow to the behemoth that it is today?
• What are the implications of Gartner’s power in the marketplace.

Background

What it is quite interesting is how little diversity there is in analyst opinion on the enterprise software market. Essentially there is one source that can be considered to really influence executive decision makers with respect to enterprise software purchases, and this is Gartner. I was aware that Gartner had purchased AMR, which was an analyst group focusing on supply chain software with a poor record for prediction which was repeatedly bamboozled by software vendors one the most elementary of topics. However, what I was unaware of was how many firms Gartner had acquired throughout its history. This listing is available right on Gartner’s website (I am assuming it is comprehensive, but may not be), and can be found at this link.

What It Means?

Gartner’s position as a single source of information that executives rely upon (some people with bring up Aberdeen or a few other sources, but none of them are close to as influential as Gartner), means that Gartner has a monopoly on analyst based influence for a very large amount of enterprise software purchases per year. Gartner has over 4,000 employees with an enormous breath of coverage. However, they drown out competing views, and Gartner has a problem with bias as it takes the most money from the largest software vendors, for which it slants its reviews (obviously). This means that Gartner, an information monopoly, itself increases the degree of monopoly concentration in the enterprise software market by its recommendations. Industry insiders at the best of breed vendors inherently understand how the game is played. Gartner wants to be paid every year to provide coverage of vendors, and actively prospects vendors. Some vendors can afford to pay and some can’t. Generally vendors do not read Gartner’s research hoping to learn anything they don’t already know, but read it to understand what executive decision makers will be digesting.

Gartner has also shown itself to be quite biased towards large vendors in my exposure to them. I wrote this article in response to an article that Gartner produced which contained numerous falsehoods, and which was really just a warmed over press release from SAP with Gartner’s name on it. Most of Gartner’s articles are nowhere nearly this brazen, but their bias shows in many ways. I once attended the CSCMP conference. At this conference was a presentation entitled something like “SAP Versus Best of Breed Solutions.” The presenters were a representative from SAP, a representative from Gartner and a representative from an implementing company. That was it, no representative from any best of breed vendor. Most of the presentation was spent with the SAP rep, who turned out to be some type of SAP salesman, talking up SAP’s new release of Transportation Manager (TM), and how successful it was. I spent much of the presentation looking up at the ceiling, as almost everything the SAP representative said during the presentation was false. SAP TM is a joke in the APO consulting community, and has been anything but successful. The Gartner representative did not know enough about the SAP product to be embarrassed about what the SAP representative was talking about. Anyone with a modicum of interest in balance, would have required at least one best of breed vendor present.

Conclusion

Gartner has grown through acquisition to be the most influential analyst covering enterprise software. However, they routinely throw their weight behind the solutions from the largest vendors which strongly influences executive decision makers. Gartner backs the larger vendor even when the larger vendor’s solution is far weaker than smaller vendors. This is, in my view, because large vendors pay Gartner so much more than smaller vendors. Gartner points to an ombudsman that ostensibly prevents the influence of money on analyst writings. However, this excuse hold up quite poorly historically. Companies that are paid by certain interests gradually come to reflect these interests. This is as true of magazines and their advertisers as it is of bond rating agencies and members of Congress. Therefore, while Gartner’s ombudsman is a nice sounding fascia, every organization that has similar conflicts of interests makes the same claim, the weight of history supports the fact that money buys influence. If it did not, it would not be given. If SAP or Oracle thought they could get the same rosy coverage out of Gartner that they do with their current financial contributions, they would stop making contributions tomorrow.

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